Published: November 23, 2010 at 12:12 pm

As millions of people get groped at the airport this Thanksgiving, we at Insider Monkey, your source for free insider trading data, marvel at how the underwear bomber has managed to finagle power in the most unexpected way.

We think the SEC should take a tip from the TSA and handle all insiders as well. We say this because recently two businessmen found a loophole in the financial regulations and almost got away with insider trading.

Those two businessmen are Ali Hariri, a vice president at Atheros Communications Inc (ATHR), and Ali Far, a hedge fund manager. According to Preet Bharara, the United States Attorney for the Southern District of New York, Hariri gave material, nonpublic information (“inside information”) regarding Atheros to Far, for the purpose of executing profitable securities transactions.

Bharara says Hariri knew the information he provided to Far was material and non-public, and he disclosed it in breach of fiduciary and other duties of trust and confidence that he owed to Atheros. In exchange for inside information regarding Atheros, Bharara says, Far provided Hariri with tips to buy and sell the stocks of other technology companies.

Insider Monkey thinks it’s obvious that since Hariri knew that he would have to report Atheros transactions (currently insiders are required to report only those transactions that are of their company’s stocks and derivatives), he decided to instead barter his inside knowledge with Far. What the Alis did was illegal, but they followed the financial regulations in the process.

Bharara says Hariri’s sentencing of 18 months in prison is a “reminder of how pervasive insider trading has become and the lengths to which corrupt insiders will go to misuse confidential information for their own personal gain.

“It should also remind those who might contemplate similar crimes that we will ultimately find you, prosecute you, and convict you. This office is committed to stopping insider trading in its tracks to protect the integrity of our markets.”

Insider Monkey thinks then that the government should do what the TSA is doing and make all insiders go through a rigorous pat down. Most probably, they’ve nothing to hide. But if they are hiding something, the government will find it.

This case is a clear proof that insiders will go to great lengths to exploit their privileged information. It has been proven in court that insiders do indeed illegally exchange inside information.

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.